What Is an ERP System? Know The Basics

ERP is an acronym for enterprise resource planning. It mainly refers to software packages and
Systems used by different companies to manage their daily activities. It is
used to manage activities such as procurement, accounting, manufacturing and
project management. ERP systems are known to work together in order to aid
various business processes. Not only that, but it also enables the flow of data
between the various business processes. ERP
system aids in eliminating duplication of data by gathering a company’s
transactional data from various sources. In addition, it also provides Data
integrity.

Today, the
ERP
system has emerged to be one of the greatest necessary for every business
and organizations. Thousands of business houses are known to make use of ERP
systems for their benefit. For these companies, it can be said that ERP has
become completely indispensable.

Fundamentals of ERP

ERP system is
known to design around a defined data structure that usually has a common
database. ERP systems make use of common definitions and constructs and common
User experience in order to provide access to the company’s data from various
activities.

One of
the key principles of ERP systems is the collection of data for wide distribution. With the use of ERP systems, you can have a single database. This
allows in eliminating all the chaos involved. With the ability of a centralized
and secure data repository, everyone in the company will be confident about the
fact that the data is up to date, correct and complete. It also ensures Data
integrity for every single task that is performed throughout the organization.

Business value of ERP

As
already mentioned earlier, ERP is one of the most important systems that is
required by business houses. That’s because,
with the use of the ERP system, businesses can
avail several benefits.

1. It
improves business insight:

2. It
helps in reducing the operational costs of an organization.

3. With
the use of an ERP system, an organization
can promote enhanced collaboration.

4. ERP
systems are also known to improve the efficiency of business processes.

5. The
system can also cut down on the risk factor by the process of data integration.

6. The
system also provides a consistent infrastructure to an organization.

Different types of ERP

ERP can
be of various types. It can be grouped by business size, deployment, and functional levels. Here are the main types
of ERP.

1.
Generalist ERP: these solutions are known to come with powerful integration and
customization to meet the various requirements of the industry.

2.
Vertical ERP: this type of ERP is mainly used by small-sized businesses that focus on a particular niche.

3.
Small business ERP: this type of ERP solutions can be described as on-premise or off-the-shelf cloud ERP
solutions.

4. Open
source ERP: open source ERP solutions are mainly beneficial for developers as
it can increase user adoption and usability because of the highly customized
processes.

To conclude, it can be said that ERP is
very crucial for the smooth flow of business processes. This is why every organization needs to be smart enough while
choosing an ERP system for their business.